Apply scale/location deforms mesh
Select the mesh only, open the Dopesheet, switch to Action Editor mode, click on Only Include Channels Relating to Selected Objects option, you can see that you've given your mesh an action called "Action". This action includes X, Y and Z scales that influence the scale of your mesh, and if you applied the scale it made your mesh smaller. You should not give any action to your mesh, only to the armature that controls this mesh, so just click on the X button to close this action. Also you should join the tentacle bones to the root bone to make it simpler.